In a 96-page report entitled All Along The Watchtower,PIAC encourages provincial regulators to amend collection laws to give greater protection to consumers.

“I believe the provincial consumer affairs ministers could do a better job enforcing the laws and regulations that are in place,” said Jonathan Bishop, who wrote the report for the centre.

Bishop said reforms are important because as Canadian debt levels rise, debt and delinquencies will go up.

“We may find more and more Canadians faced with this situation, where they’re being contacted by a collections agency,” he said.

Mark Silverthorn, a former lawyer who worked for collection agencies and now lobbies for better consumer protection, said the industry is rife with examples of abusive behavior. He saaid regulation in Alberta is the best in the country, but Canada’s largest province is not doing enough.

“Consumers in Ontario are being taken advantage of by collection agencies,” said Silverthorn. “The message they’re conveying is: we’re going to make your life miserable.”

He describes how some collectors badger recent immigrants and threaten to have them deported if they don’t pay up. In other cases, he says collectors tell parents they’ll contact children’s aid workers if a debt isn’t paid. In some cases, collectors tell children who answer the phone their parent is a “deadbeat”.

“That’s illegal,” Silverthorn said, but adds laws are ineffective. In the United States, federal law gives consumers the ability to sue debt collectors, without relying on consumer regulators. Silverthorn says there is a “cottage industry” of lawyers in the U.S. representing consumers who are under pressure from collectors.

“In those jurisdictions where there are severe financial penalties, the conduct is much more socially acceptable,” he said.

The Ontario government says changes are in the works for the collection industry in the wake of a report from a panel looking into the payday lending and collection sector.

“We plan to have new legislation ready to tackle these problems in the collection industry, and protect indebted and vulnerable consumers later this year,” said Stephen Puddister, a strategy adviser at Ontario’s consumer ministry, in an email. However, there is no indication whether collection agencies will face stiffer penalties for breaking the rules.